After nearly six months of digging, the Washington State Auditor’s Office has completed its special investigation into missing revenue from city-sponsored events in Washougal but was unable to determine what happened to more than $100,000.
Due to insufficient record-keeping and one company’s refusal to participate in the audit, the investigators were unable to determine if the city is owed any money or whether public money was misused, lost or misappropriated.
However, Mayor Sean Guard said he has no doubt city money was mismanaged. Guard has asked the Clark County Sheriff’s Office to launch a criminal investigation, which has already begun, to try to get answers from people unwilling to cooperate with state auditors.
“I firmly believe there is still more to the story than what anyone has been able to accurately portray,” he said. “You don’t go down the road for so long with big things sliding under the radar.”
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The auditor’s office met with city officials Friday morning to release its findings. The auditor’s office provided the city with a one-page summary of the investigation and will not be issuing a report, Guard said. To date, the city has paid $3,379 for the investigation. It is unclear if the city will incur additional costs.
As part of the special investigation, the auditors interviewed current and former city staff members, council members, former Mayor Stacee Sellers, Guard, nonprofit employees and vendors. However, the main vendor involved, Columbia River Productions, declined to provide the auditor’s office with records and declined numerous requests for an interview, according to the auditor’s letter to the city. Columbia River Productions and a nonprofit group, Washougal Downtown Revitalization and Implementation Committee, helped organize and host the events.
The auditor’s investigation also found the city had no written agreements detailing payments and responsibilities with DRIC or Columbia River Productions for any of the events.
Guard said the auditor’s office was unable to find any business filings for the Camas-based Columbia River Productions in Oregon or Washington. The company is not listed in the phone book, and The Columbian on Friday could not locate the business in the state Department of Revenue’s database of businesses. The city of Camas does not issue business licenses. A business with the same name was issued a business license in the city of Vancouver in 1997.
The auditor’s office launched the special investigation in October following an accountability audit that questioned the city’s spending.
In the accountability audit, the auditor’s office found the city could not account for money collected during several city-sponsored community events and made questionable expenditures and gifts of public funds. The audit report estimated Washougalfest 2008 and Riverfest 2009 should have generated at least $100,000 in revenue but the city did not deposit revenue from either event, with the exception of one sponsorship for $5,000. The city also did not deposit any receipts from the summer 2009 Washougal Main Street Market. In October, Sellers said DRIC used the revenue from the events to offset other expenditures it incurred on behalf of the city.
The city spent, not including staff time, more than $120,000 for the 2008 Washougalfest and more than $26,600 for the 2009 Riverfest. In addition, the city paid DRIC $75,000 in 2008 and $50,000 in 2009 to help coordinate those events and other smaller events, according to the auditor’s accountability report.
All public officials are required to file financial reports with the state, disclosing their sources of income and other offices they hold. In 2004 and 2005, Sellers listed herself as president of the DRIC board, according to the forms filed with the Washington Public Disclosure Commission. Sellers was appointed to the council in June 2003 and was elected mayor in November 2005. She resigned under pressure last year.
This year, the city removed all funding for DRIC from its budget, and the city has no plans to hold Riverfest this year, Guard said. Members of DRIC are renaming the organization Two Rivers Community Group and may sponsor a farmers market, but the city will not provide any financial support, he said.
Since the accountability audit was released in October, Guard said the city has made policy and procedural changes. The city has made revisions to its whistle-blower policy to make it easier for employees to report possible improprieties, developed an ethics policy that applies to all city employees and elected officials, provided the finance committee with additional training, formed a lodging tax advisory committee to oversee hotel-motel tax revenue expenditures, implemented a policy clearly outlining when and how the city enters into contracts with outside agencies and improved internal controls in the finance department.
